THE  CURRENCY  CONFLICT." 


ADDRESS 

OF 

J.  W.  SCHUCKERS,  Esq., 

BEFORE  THE 

LIBERAL    CLUB    OF    NEW    YORK  CITY, 

On  Friday  Evening,  June  23d,  i8j6. 


[The  speaker  began  by  saying  that  the  Evening  Post  newspaper,  in  its  issue  of  the 
afternoon — that  is  to  say,  of  June  23d — had  urged  upon  the  public  the  necessity  of 
keeping  the  paramount  currency  question  in  the  front  both  of  the  Presidental  and 
Congressional  discussions,  and  in  the  correctness  of  this  observation  the  speaker  said 
he  entirely  concurred.  He  said  that  the  magnitude  and  importance  of  the  currency 
question  were  not  sufficiently  apprehended,  and  outside  of  one  of  the  Western  States 
— meaning  especially  Ohio — it  had  not  been  discussed  at  all,  and  certainly  not  in  the 
Eastern  pYess  or  State-.  In  the  East  it  was  pretty  generally  assumed  that  there  was 
but  one  side  to  it,  and  upon  this  most  erroneous  assumption  the  public  sentiment 
sluggishly  and  credulously  rented  itself.  It  was  time  that  some  discussion  should 
take  place,  and  to  it  the  speaker  said  he  was  glad  to  make  contribution  from  the 
general  standpoint  of  an  Ohio  Democrat.    He  then  proceeded  to  say,  that :] 

Fifteen  years  ago  the  American  people  suddenly  found  themselves  confronted  by 
the  inexorable  necessity  either  of  abandoning  the  war  for  the  Union  or  of  resorting 
to  a  system  of  inconvertible  paper-notes  upon  which  to  wage  it ;  and  they  had  to 
choose  between  the  inconvertible  notes  of  the  State  banks  or  inconvertible  notes  is- 
sued by  the  federal  government.  They  preferred  the  latter,  although  vindictively 
opposed  in  their  election  by  the  selfishness  and  cupidity  of  bankers  and  the  general 
principles  of  the  political  economists. 

Time  has  abundantly  vindicated  the  wisdom  of  the  choice  then  made.  The  use 
of  the  national  credit  as  the  foundation  of  the  monetary  system,  enabled  the  govern- 
ment to  carry  the  war  to  a  triumphant  conclusion,  and  to  re-establish  its  authority 


everywhere  throughout  its  former  borders;  at  the  same  time  that  it  supplied  to  the 
people  a  sounder  and  more  stable  instrument  of  exchange  than  the  country  had  ever 
before  known. 

Undoubtedly  serious  injustice  resulted  to  many  persons  in  consequence  of  exces- 
sive emissions,  but  such  emissions  and  resulting  injustice  were  inseparable  from  a 
state  of  war,  and  probably  would  have  happened  under  any  monetary  system  possible 
to  have  been  maintained  amidst  the  political  disorder  and  uncertainty  which  charac- 
terized the  rebellion  period. 

A  hard  money  war  was  clearly  impossible.  To  use  a  somewhat  violent  figure  of 
speech,  gold  and  silver  are  cowards  and  traitors ;  in  the  time  of  sorest  peril  and  ex- 
tremity, when  most  needed,  they  hid  themselves  out  of  sight  or  fled  away  into  foreign 
countries.  Our  dependence,  then,  was  necessarily  upon  a  paper  system ;  and  it  was 
this  system  that  enabled  us  to  preserve  the  integrity  and  permanency  of  the  American 
Union.  But  no  sooner  was  the  war  at  an  end  than,  to  pursue  the  figure  already 
begun,  gold  and  silver,  impudent  and  insolent  as  well  as  cowardly  and  treacherous, 
from  their  hiding-places  at  home  or  still  abiding  in  foreign  countries,  set  up  a  clamour 
for  reinstatement  in  the  monetary  sovereignty  of  America,  at  the  same  instant  that 
they  assailed  the  friends  of  the  paper  system,  who  protested  against  the  enormous 
injustice  involved  in  this  reinstatement,  as  either  knaves  or  fools. 

The  people  did  not  pay  much  attention  to  this  clamour  until  after  the  panic  of  1873. 
That  tremendous  disaster  furnished  to  the  enemies  of  the  paper  system,  which  I  shall 
call  the  American  System,  a  new  ground  of  assault,  of  which,  indeed,  they  were 
not  slow  to  avail  themselves.  In  defiance  of  all  truth,  in  the  very  face  and  front  of 
all  history  and  experience,  they  charged  that  great  calamity  to  be  a  natural  and 
necessary  consequence  of  the  use  of  inconvertible  paper  money  ;  and  upon  this  charge 
they  rung  the  changes  with  unremitting  vehemence.  They  protested  that  nothing 
would  restore  soundness  and  prosperity  to  the  commerce  and  industry  of  the  country 
except  a  return  to  gold  and  silver  as  the  basis  of  the  currency.  Office-holders  and 
bondholders,  capitalists  and  bankers,  brokers  and  speculators,  politicians  and  politi- 
cal economists ;  the  whole  unproductive  classes,  in  a  word,  joined  in  the  clamour, 
and  it  did  not  take  long  to  involve  in  it  almost  the  whole  body  of  the  Republican 
leaders,  and  very  largely  the  leaders  of  the  Democratic  party  also.  But  there  were, 
and  continue  to  be.  many  notable  exceptions  :  and  sooner  or  later,  either  the  Repub- 
lican or  the  Democratic  party — probably  the  latter — will  range  itself  squarely  and 
bravely  against  the  enormous  and  utterly  indefensible  injustice  which  resumption 
must  inflict  upon  the  productive  classes;  and  sooner  or  later  the  PEOPLE,  taught  by 
loss  and  suffering  that  "honesty  is  the  best  policy,"  will  raise  that  party  into  the 
control  of  the  government.  For  a  resumption  of  specie-payments,  in  the  existing 
circumstances  of  America,  is  nothing  less  than  a  vast  scheme  of  spoliation  and  con- 
fiscation ;  a  contrivance  for  transferring,  without  equivalent,  a  large  part  of  the  prop- 
erty of  the  country  from  a  less  fortunate  to  a  more  fortunate  class  of  citizens  ;  a 
measure  of  flagrant  wrong  and  outrage  upon  American  industries ;  a  cruel  device  for 
permanently  deteriorating  and  debasing  the  condition  and  character  of  American 
artisans  and  labourers,  both  men  and  women.  This  is  what  resumption  really  means, 
however  it  may  be  veiled  under  high-sounding  cant  about  the  evils  of  an  irredeema- 
ble paper  currency,  the  obligations  of  public  honour,  the  sacredness  of  public  credit, 


3 


and  the  demands  of  a  sound  public  policy.  No  one  ever  heard  of  a  great  public 
wrong,  proposed  or  proceeding,  which  did  not  justify  itself  upon  some  speciously 
plausible  pretext,  and  this  business  of  resumption  is  no  exception  to  a  rule  that  is 
universal.  Slavery  itself — a  system  at  war  with  every  natural  sentiment  and  instinct 
of  justice — intrenched  itself  behind  the  most  vehement  appeals  to  Scripture  and  the 
organic  law.  I  very  earnestly  hope  that  the  Democratic  party,  so  long  and  fatally 
wrong  upon  the  slavery  question,  will  retrieve  its  great  error  upon  that  by  taking  a 
right  position  upon  the  money  question,  not  less  important  in  all  its  bearings  upon 
the  happiness  and  prosperity  of  the  people,  than  was  the  question  of  slavery. 

It  is  painfully  true  that  great  losses  and  sufferings  have  been  endured  by  the  Amer- 
ican people  since  the  panic  of  1873.  ^ut  extensive  and  distressing  as  they  have 
been,  they  are  mere  preludes  to  the  indefinitely  greater  ones  still  impending  if  the 
work  of  resumption  is  persisted  in  to  the  end.  All  the  moral  and  physical  evils  that 
attended  upon  the  suppression  of  the  rebellion  must  be  repeated  in  the  operation  of 
establishing  a  specie  standard  in  these  United  States.  As  many  human  lives  must 
be  sacrificed,  as  much  physical  suffering  inflicted,  and  as  much  property  destroyed, 
in  the  progress  of  the  work  of  resumption  as  took  place  in  the  course  of  the  suppres- 
sion of  the  rebellion. 

I  am  perfectly  well  aware  that  this  sounds  like  extravagance;  but  it  is  not,  as  an 
attentive  consideration  of  the  stupendous  work  to  be  accomplished  will  abundantly 
show. 

Now,  it  is  not  a  hard  matter  to  substitute  a  less  valuable  for  a  more  valuable  in- 
strument of  exchange.  In  other  words,  it  is  not  especially  difficult  to  substitute  a 
depreciated  paper-money  for  a  full  weighted  and  perfect  money  of  gold  and  silver; 
on  the  contrary,  experience  shows,  very  conclusively,  that  the  progress  of  such  a 
substitution  is  usually  marked  by  all  the  signs  of  an  advancing  prosperity.  But  to 
substitute  a  more  valuable  money  for  one  of  less  value — as  for  example,  a  full 
weighted  gold  coinage  for  an  inconvertible  depreciated  paper  money — is  a  work  of 
greater  or  less  difficulty  and  hardship;  and  the  degree  of  hardship  and  difficulty  ex- 
perienced in  the  progress  of  the  substitution  will  depend  upon  the  extent  of  the  de- 
preciation to  be  overcome. 

There  is  but  one  possible  way  of  measuring  the  extent  to  which  the  paper-money 
of  a  country  is  depreciated,  and  that  is,  by  the  cost  of  restoring  it  to  a  specie-valua- 
tion. By  the  words  "  restoration  of  a  specie-valuation,"  I  do  not  mean  merely  a 
condition  in  which  the  paper-money  of  a  country  is  at  a  nominal  par  of  gold;  but 
the  establishment  of  an  actual  state  of  convertibility  of  the  paper-notes  into  the  stan- 
dard gold  coin.  Mr.  Webster  laid  down  the  true  rule  when  he  declared  that  no 
paper-notes  could  be  made  or  kept  equal  in  value  to  gold  which  were  not  actually 
convertible  into  gold  on  demand ;  and  he  proposed  a  very  stringent  rule  for  preserv- 
ing their  convertibility.  A  nominal  par  of  the  circulating  paper-notes  and  gold  at 
this  time  exists  in  France,  but  that  the  notes  of  the  Bank  of  France  are  of  less  actual 
value  than  the  standard  gold  coin  of  the  Empire  is  proved  by  the  fact  that  they  con- 
tinue to  be  inconvertible;  although  the  Bank  has  four  hundred  millions  of  gold  and 
silver  with  which  to  redeem  less  than  five  hundred  millions  of  notes,  were  the  Bank 
disposed  to  enter  upon  the  work  of  redemption.  But  resuming  specie  payments  is 
not  so  easy  an  operation  as  the  average  American  financier  is  prone  to  allege.  And 


4 


you  will  allow  me  to  observe,  that  brilliant  and  conservative  as  the  administration  of 
the  Bank  of  France  admittedly  is — extraordinary  and  unprecedented  as  its  present 
position  of  strength  is— that  most  powerful  and  opulent  establishment  still  has  before 
it  the  perilous  work  of  effecting  an  actual  resumption.  To  restore  the  convertibility 
of  French  Bank-notes  into  French  coin  is  still  the  great  business  to  be  accomplished, 
and  that  such  a  restoration  will  tax  all  the  splendid  powers  even  of  the  most  impreg- 
nable organization  of  credit  on  a  grand  scale  in  the  world — as  the  New  York  Tribune 
once  called  the  Bank  of  France — will  be  proved  by  the  event. 

Now,  if  the  extent  to  which  the  paper-notes  of  a  country  are  depreciated  is  to  be 
measured  only  by  the  cost  of  restoring  them  to  a  par  with  the  standard  coin,  by  mak- 
ing them  actually  convertible  into  such  coin  on  demand,  how  are  we  to  ascertain  the 
cost  of  their  restoration?  Well  there  is  but  one  way  of  doing  this  also,  and  that  is  by 
ascertaining  the  extent  of  the  contraction  which  must  be  effected  before  an  actual 
condition  of  convertibility  can  be  established;  and  I  assume  as  a  practical  scientific 
fact,  from  which  there  is  no  possible  escape,  that  the  only  way  in  which  convertibility 
can  be  established  is  by  contraction. 

The  contraction  to  be  effected  in  this  country,  then,  before  a  sound  state  of  convert- 
ibility can  be  established,  is  not  less  than  one-half,  certainly,  of  the  whole  outstand- 
ing circulation  of  legal  tender  and  national  bank-notes;  that  is  to  say,  the  present 
paper  circulation  being -about  seven  hundred  and  fifty  millions  of  dollars,  must  be 
reduced  to  a  total  sum  not  exceeding  three  hundred  and  fifty  millions.  For  it  is  import- 
ant to  observe,  that  to  resume  specie-payments  involves  not  only  an  appreciation  of  the 
paper-money  of  the  country  to  an  actual  gold  value,  but  an  extensive  appreciation  of 
the  precious  metals  themselves.  The  nominal  difference  between  gold  and  paper  is 
12  or  13  per  cent.,  but  the  actual  and  potential  difference  is  40  or  50  per  cent.  This 
is  a  consideration  of  some  subtlety,  and  is  best  illustrated  by  a  reference  to  actual 
facts.  When  the  act  of  parliament  was  passed  in  181 9  requiring  the  Bank  of  Eng- 
land to  resume  specie-payments  within  a  period  of  four  years,  the  premium  on  gold 
was  only  about  five  per  cent.,  and  the  advocates  of  resumption — conspicuous  among 
whom  was  the  celebrated  economist  Ricardo — boldly  declared  that  the  whole  busi- 
ness involved  a  matter  of  no  greater  importance  than  that  of  raising  the  value  of 
bank-notes  five  per  cent.  Sad  and  even  terrible  experience  realized,  however,  the 
enormous  mistake  that  had  been  made ;  for  in  order  to  establish  a  state  of  converti- 
bility, it  was  found  necessary  to  appreciate  the  value  of  Bank  of  England  notes '  50 
per  cent.,  and  the  value  of  gold  and  silver  not  less  than  45  per  cent.!  This  tremen- 
dous enhancement  in  the  value  of  money  was  shown  by  the  fact  that  the  universal 
prices  of  commodities  in  the  British  Islands  and  the  wages  of  labour  fell  upon  an 
average  of  50  per  cent,  within  a  period  of  less  than  three  years !  The  fall  proved  to 
be  permanent  also;  and  although  it  advantaged  the  fundholders  and  many  bankers, 
capitalists  and  speculators,  it  had  a  frightful  effect  upon  multitudes  even  of  the  rich,  upon 
men  of  moderate  fortunes,  and  upon  the  artisans  and  labourers  of  the  kingdom;  and 
indeed  upon  the  whole  productive  classes,  as  I  shall  presently  show  you  upon  unim- 
peachable testimonies.  We  have  lately  had  in  our  own  country  a  curious  illustration 
of  this  same  error  of  confounding  a  nominal  depreciation  with  a  real  one.  The 
Congress  of  the  United  States,  not  long  ago,  legislated  a  fractional  currency  of  silver, 
and  wilfully  debased  it  below  its  nominal  value  in  the  current  paper  money.    It  was 


5 


supposed  that  this  debasement  would  keep  the  new  coins  in  circulation,  since  no 
motive  could  be  foreseen  for  taking  them  out.  But  greatly  to  the  surprise  and  disap- 
pointment of  the  resumptionists,  these  degraded  and  dishonest  coins  disappear  about 
as  fast  as  the  Mint  can  issue  them,  and  Wall  and  Third  Street  brokers  buy  them  at  a 
premium!  Here  is  a  dilemma  from  which  our  Congressional  financial  philosophers 
will  find  some  difficulty  in  extricating  themselves;  for  their  new  silver,  degraded  as 
it  is,  will  disappear  as  steadily  as  it  is  issued,  even  if  they  were  to  issue  fifty  millions 
a  year!  and,  indeed,  the  more  they  issue  the  faster  it  will  go!  The  reason  is,  sim- 
ply, that  the  precious  metals  are  far  more  extensively  depreciated  in  this  country  than 
is  indicated  by  the  current  premium  on  gold:  the  true  depreciation  being,  probably, 
anywhere  from  35  to  50  per  cent.;  from  which  it  necessarily  follows  that  every  effort 
to  keep  them  in  circulation,  until  their  real  value  is  fully  restored,  will  prove  utterly 
fruitless.  It  is  then  a  very  mischievous  and  misleading  fallacy  to  suppose  that  the 
current  premium  on  gold  marks  the  real  extent  to  which  our  paper-money  is  depre- 
ciated. [I  beg  to  say,  by  way  of  necessary  explanation,  that  in  using  the  word 
depreciation,  I  do  not  mean  to  imply  that  the  money  of  the  country  is  in  discredit. 
There  has  been  a  steady  depreciation  since  the  discovery  of  the  California  and  Aus- 
tralian mines  in  the  value  both  of  gold  and  silver,  but  they  are  not  thereby  discred- 
ited. What  I  wish  to  imply  is,  that  the  volume  of  our  paper-money  being  larger 
than  it  would  be  if  composed  of  gold  and  silver  and  convertible  notes,  is  of  less  value 
than  if  more  limited  in  quantity.  I  may  add,  moreover,  that  the  fact  of  deprecia- 
tion, once  established,  is  not  of  itself  necessarily  an  evil,  if  the  difference  between 
the  paper  and  gold  be  due  to  the  natural  fluctuations  which  take  place  in  the  value 
of  the  metal,  and  not  to  changes  in  the  volume  of  the  paper  which,  for  the  time 
being,  forms  the  instrument  of  exchange.  In  such  a  case,  the  fluctuations  between 
paper  and  gold  may  be  likened  to  the  fluctuations  between  gold  and  silver  in  coun- 
tries supporting  a  double  standard  ;  and  that  a  double  standard  has  great  and  pre- 
ponderating advantages  is  a  proposition  approved  both  by  reason  and  experience.] 

There  are  three  ways  by  which  we  can,  with  an  almost  absolute  certainty,  ascertain 
the  extent  of  the  contraction  necessary  to  be  effected  before  a  convertible  system  can  be 
established  in  this  country.  1st.  By  ascertaining  the  total  amount  of  convertible 
paper-notes  sustainable  in  other  commercial  countries;  2d.  By  examples  of  con- 
traction effected  in  other  instances  of  inconvertibility  overcome  and  convertibility, 
either  real  or  nominal,  reestablished  ;  and  3d.  By  comparison  of  prices  in  our  own 
and  competing  nations. 

Now,  by  referring  to 'facts,  we  find  that  the  British  Banks  are  not  able  to  support 
a  convertible  note  circulation  of  move  than  two  hundred  and  fifty  millions  of  dollars, 
or,  substantially,  fifty  millions  of  pounds  sterling;  and  even  to  preserve  this  rela- 
tively small  sum  in  a  condition  of  sound  convertibility,  the  Parliament  long  ago 
found  it  necessary  to  impose  upon  the  national  and  minor  banks  of  the  Empire, 
regulations  of  the  most  rigid  and  stringent  kind.  The  Bank  of  France  never  sup- 
ported a  convertible  circulation  greater  in  amount  than  280  millions,  and  had  to 
suspend  at  the  first  shock  of  war :  the  present  convertible  circulation  of  the  whole 
banks  of  the  German  Empire  is  270  millions;  and  the  greatest  nominally  con- 
vertible circulation  known  in  our  own  monetary  history  was  that  of  the  State  Banks 
just  prior  to  the  great  explosion  of  1857,  when  it  was  215  millions.    These  examples 


6 


would  seem  to  be  conclusive  that  we  cannot  support  in  America  a  really  convertible 
circulation  of  more  than  three  hundred  millions  of  dollars;  for  if  France,  with 
sixteen  hundred  millions  of  gold  and  silver  among  her  people  and  in  the  vaults  of 
her  national  bank;  if  England,  with  seven  or  eight  hundred  millions  of  the  precious 
metal  within  her  borders ;  if  Germany,  with  a  like  amount  at  the  command  of  her 
banks  and  people, —  if  neither  of  those  great  and  opulent  Empires  can  support  a 
convertible  circulation  amounting  to  or  exceeding  300  millions  of  dollars,  what  shall 
be  said  of  the  power  of  these  United  States  to  support  350  millions,  the  constant 
tendency  of  whose  gold  and  silver  is  to  take  to  themselvts  wings  and  fly  away?  In 
the  second  place,  we  may  ascertain  the  sum  of  the  contraction  necessary  to  be 
effected  by  reference  to  the  examples  of  history:  We  have  had  in  these  United  States 
fourgeneral  bank  suspensions  and  three  resumptions.  The  first  suspension  took  place  in 
1 8 14,  when  their  aggregate  note  emissions  were  al  out  fifty  millions  of  dollars.  The 
banks  promptly  seized  the  opportunity  to  expand,  and  by  the  end  of  1816  they  had 
managed  to  increase  their  circulation  up  to  ninety-nine  millions.  A  nominal  re- 
sumption was  effected  in  181 7  through  artificial  importations  of  silver  by  the  Bank 
of  the  United  States;  but  it  could  not  last,  of  course,  and  upon  the  disappearance 
of  the  silver  artificially  introduced  into  the  circulation  of  the  country  by  the  National 
Bank — which  had  taken  place  by  the  middle  of  the  year  1818 — the  inevitable 
reaction  >et  in,  and  the  whole  banks,  National  and  State,  set  to  work  to  save  them, 
selves  by  ruining  the  mercantile  and  industrial  community,  as  they  always  do  in  such 
times;  and  by  the  end  of  1819,  had  reduced  the  paper  circulation  from  ninety-nine 
million  in  1817  to  forty-five  millions  at  the  latter  date  :  a  contraction  of  fifty-four 
percent.!  The  misery  inflicted  upon  the  country  by  so  tremendous  a  reduction  in 
the  circulating  medium  was  widespread  and  universal,  as  the  literature  of  the  times 
most  painfully  witnesses.  But  banks  forgive  nothing,  forget  nothing,  and  learn 
nothing — and  notwithstanding  recent  experience,  in  1830,  they  began  a  new  career 
of  expansion.  Their  whole  circulation  at  the  close  of  that  year  was  about  sixty 
millions;  they  expanded  it  steadily,  until,  in  May,  1837,  it  was  149  millions.  The 
second  universal  collapse  took  place  in  that  month  and  year,  and  involved  all  the 
local  banks  of  the  country,  and  also  the  Bank  of  the  United  States.  No  sooner  was 
the  explosion  complete,  however,  than  the  richer  of  them  were  seized  with  the 
customary  spasm  of  virtue  and  immediately  began  the  work  of  "resuming."  The 
New  York  and  New  England  institutions  were  restored  to  what  was  called  a  condi- 
tion of  soundness  in  1838,  but  it  was  not  until  1843  that  a  general  resumption  was 
effected  throughout  the  country.  Meantime,  the  note  circulation  had  been  reduced 
from  149  millions  at  the  date  of  the  collapse,  to  fifty-eight  millions  in  1843:  a  con- 
traction of  sixty-three  per  cent.!  The  interval  between  the  time  of  the  explosion 
and  the  general  resumption  was  one  of  extreme  and  extensive  distress;  but  time  and 
the  hour  wore  it  out  at  last.  In  September  and  October,  1857,  another  collapse  took 
place;  the  paper  circulation  being  at  the  time  215  millions, — the  largest  circulation  of 
paper-notes,  professing  to  be  convertible  into  coin  on  demand,  known  in  the  history  of 
our  country.  Resumption  was  a  third  time  the  business  of  the  banks:  in  a  period  of 
about  four  months  they  contracted  their  note  issues  down  to  155  millions,  or  nearly 
thirty  per  cent.;  and  again  the  commercial  and  industrial  classes  sustained  the  loss 
and  suffering  inflicted  upon  them  by  bank  cupidity  and  mismanagement.    In  i86i,a 


7 


fourth  and  final  suspension  took  place;  and  how  and  by  what  measures  the  banks  are 
to  resume  is  the  supreme  question  of  the  hour!  But  whatever  may  happen  in  the 
matter,  this  is  certain  :  that  the  productive  classes  of  the  country  must  bear  the 
expense,  and  that  they  will  be  called  upon  to  pay  it  to  the  uttermost  farthing!  Of 
this,  the  country  may  be  perfectly  sure.  You  will  see,  then,  that  in  three  general 
resumptions  in  America  the  average  contraction  necessary  to  effect  them  was  nearly 
fifty  per  cent.  But  our  own  country  does  not  afford  the  only  examples  to  which  I 
wish  to  get  your  attention.  The  Bank  of  England  and  the  minor  banks  of  the 
Kingdom  of  Great  Britain  suspended  in  1797,  and  remained  in  suspension  till  1821  — 
a  period  of  substantially  twenty-four  years.  In  1819  Parliament  passed  an  act  under 
which  they  were  required  to  resume  within  a  specified  time.  The  whole  note  circu- 
culation  of  the  Kingdom  at  the  date  of  the  passage  of  this  act  was  250  millions;  at 
the  date  of  the  resumption — which  was  accomplished  in  1821 — it  had  been  reduced 
to  129  millions:  a  contraction,  substantially,  of  FIFTY  per  cent.  I  will  show  you 
presently  what  universal  disasters  attended  upon  so  vast  a  reduction  in  the  current 
money  of  the  Empire.  The  last  example  is  that  of  Erance.  The  Bank  of  Erance 
suspended  specie-payments  in  1 870,  at  which  time  its  note  circulation  was  280 
millions  of  dollars.  Gold  and  silver  disappeared  from  the  business  of  the  country, 
and  it  proceeded  wholly  upon  paper  money  made  a  legal-tender.  The  consequence 
of  this  was  a  large  expansion  of  the  note  emissions;  until,  at  one  moment  in  1873, 
they  aggregated  614  millions.  When  the  war  with  Germany  and  the  Commune  had 
come  to  an  end,  and  the  indemnity  had  been  provided  for,  the  Bank  began  to  set  its 
house  in  order  preparatory  to  resumption  of  specie-payments,  which  it  is  under  a 
legal  obligation  to  accomplish  by  the  first  day  of  January  1878.  It  has  at  this  time 
reduced  its  note  emissions  to  less  than  500  millions,  a  contraction  of  about  twenty- 
one  per  cent. ;  but  until  the  circulating  notes  are  reduced  to  their  natural  limits — 
which  I  venture  to  fix  at  300  millions — the  Bank  of  Erance  can  no  more  resume 
specie-payments  than  can  the  National  Banks  of  New  York,  notwithstanding  the 
presence  in  her  vaults  of  400  millions  of  gold  and  silver  coins  and  bullion.  The 
contraction  to  be  effected  by  the  Bank  of  France  is,  then,  fifty  per  cent.  These 
several  instances  are  somewhat  curious  in  their  results,  for  they  seem  to  imply  an 
almost  fixed  law  of  contraction  preliminary  to  resumption.  Finally,  the  prices  of 
commodities  in  commercial  countries  are  an  element  of  high  importance  in  deter- 
mining the  distribution  among  them  of  the  precious  metals;  and  if  an  "  equalization 
of  money"  be,  as  is  alleged  by  Professor  Bowen  in  his  American  Political  Economy, 
•'an  equalization  of  prices,"  as  doubtless  it  is,  it  is  highly  interesting  to  inquire  how 
prices  compare  as  between  our  own  country,  and,  for  example,  (beat  Britain.  The 
precious  metals  are  the  highest  priced  and  the  most  valuable  of  all  the  articles  of 
commerce;  and  it  is  a  universal  law,  that  they  never  leave  a  country  except  when 
they  are  the  cheapest  commodity  that  can  be  exported;  that  is  to  say,  when  it  is 
more  profitable  to  export  them  than  the  ordinary  fabrics  or  products  of  the  country. 
Thus,  if  an  English  merchant  owe  an  American,  he  will  pay  his  debt  by  the  cheapest 
means.  Suppose  the  debt  to  be  one  hundred  dollars.  If  he  can  pay  it  by  sending 
to  America  hardware  which  in  the  English  market  costs  but  95  dollars  he  will 
certainly  do  so,  unless  he  can  send  cotton  goods  which  cost  but  90  dollars.  But  if  it 
would  cost  101  dollars  to  send  either  cotton  or  hardware,  he  will  send  the  gold. 


8 


Hence  the  law  established  half  a  century  ago  by  Mr.  Ricardo,  that  when  prices  are 
high  in  a  country,  gold  and  silver  will  flow  out  of  it ;  if  low,  the  opposite  will  happen 
and  they  will  flow  into  it.  Now,  prices  are  higher  in  this  country  than  in  Great 
Britain  because  the  current  money  is  in  excess;  for,  in  practice,  the  circulating 
paper-notes  of  a  commercial  country  are  the  primary  agency  which  fixes  prices  in 
that  country.  This  is  the  doctrine  of  Lord  Overstone,  the  ablest  and  most  philo- 
sophical of  all  English  writers  on  the  science  of  money,  and  that  it  is  correct  I  do  not 
doubt.  What  per  cent,  then  are  prices  higher  in  America  than  in  England  ?  I  have 
not  time  to  go  into  details  here:  but  the  difference  in  the  prices  of  the  exportable 
fabrics  and  products  of  the  two  countries,  measured  in  the  money  of  the  two  coun- 
tries respectively,  is,  so  near  as  I  am  able  to  fix  it,  not  less  upon  the  average  than 
forty  per  cent.  If  we  add  to  this  the  costs  of  transportation  to  markets  contiguous 
to  the  British  Islands,  the  difference  will  be  found  to  be  nearly  or  quite  fifty  per 
cent.  This  is  the  difference  to  be  overcome  before  we  can  stop  the  exportation  of 
American  gold  and  silver  or  attract  hither  the  gold  and  silver  of  Europe.  In  other 
words,  we  must  contract  the  currency  of  the  country  fifty  per  cent.,  as  an  indis- 
pensable prelimimary  to  resumption. 

Now,  there  is  no  possible  road  to  convertibility  except  by  that  of  unremitting  and 
relentless  contraction.  All  the  authorities  agree  to  this;  and  the  object  of  the  con 
traction  is  to  create  scarcity  of  the  current  money ;  to  create  that  intense  and  pro- 
tracted scarcity  which  may  justly  be  called  a  state  of  monetary  famine  ;  which  shall 
be  so  unremittingly  oppressive  that  men  will  be  forced  to  part  with  their  labour  and 
property  at  steadily  diminishing  prices,  no  matter  how  earnestly  they  may  struggle 
against  the  losses  they  are  compelled  to  suffer  in  consequence.  Recollect  the  pow- 
erful agency  of  money  in  all  the  complex  affairs  of  our  modern  civilization — its  influ- 
ence upon  the  destinies  of  the  Church,  the  State  and  the  Family — and  you  will  at 
once  see  how  tremendously  any  tampering  with  its  value  must  affect  all  the  relations 
of  our  social  organization.  Inflation  is  one  way  of  tampering  with  it,  but  the  worst 
possible  form  of  interference  is  arbitrarily  to  raise  its  value.  Contraction  is  the  one 
potent  method  of  doing  this,  and  is  always  attended  by  a  greater  or  less  degree  of  loss 
and  suffering,  because  its  effect  is  to  depress  and  destroy  the  value  of  all  other  com- 
modities, whether  labour,  or  the  products  of  labour,  or  the  soil  itself.  It  disturbs  and 
deranges  every  operation  of  industry  and  commerce,  and  produces  all  the  signs  and 
realities  of  misery  and  distress  the  American  people  are  now  suffering — of  labour 
unemployed,  of  mills  and  workshops  idle  and  deserted,  of  storehouses  filled  with  fab- 
rics for  which  purchasers  cannot  be  found,  of  ships  out  of  commission,  of  money  accu- 
mulated in  the  hands  of  bankers,  capitalists  and  speculators — the  reason  of  all  being 
that,  in  the  midst  of  the  constantly  recurring  failures  and  bankruptcies  that  always 
and  inevitably  follow  in  the  wake  of  a  diminishing  volume  of  money,  confidence  is 
destroyed  and  the  functions  of  credit  paralyzed.  Nor  must  it  be  supposed  that  the 
failures  and  bankruptcies  that  take  place  in  these  miserable  times  are  necessarily  the 
results  either  of  business  mismanagement  or  of  fraud  ;  for  it  would  be  a  false  and 
unfounded  supposition  ;  in  most  instances  they  are  the  natural,  necessaiy  and  un- 
avoidable consequences  of  a  cruel  and  wicked  public  policy — the  policy  of  contrac- 
tion of  the  currency.  It  is  from  that  same  cruel  and  wicked  policy  of  contraction 
that  the  whole  productive  classes  of  the  country  are  suffering ;  it  is  the  same  cruel 


9 


and  wicked  policy  of  contraction  that  is  eating  up  the  vitals  and  destroying  the  com- 
merce and  prosperity  of  this  great  metropolis.  Let  me  call  your  attention  to  a  very 
striking  fact.  Since  the  work  of  resumption  began,  the  currency  has  been  contracted 
about  thirty -five  millions,  and  no  important  impression  lias  yet  been  made  upon  the 
price  of  gold.  But  see  the  utter  and  universal  prostration  of  all  our  industries!  If 
so  small  a  contraction  has  exerted  such  powerful  effects  upon  the  commerce  and  in- 
dustries of  the  people,  what  will  be — what  ?nust  be — the  consequences  of  the  tremen- 
dous contraction  of  four  hundred  millions  of  dollars  still  inexorably  necessary  to  be 
accomplished  before  a  system  of  convertible  notes  can  be  finally  established?  In 
answer  to  this  question,  I  repeat  what  I  said  at  the  beginning,  that  so  enormous  a 
diminution  in  the  money  of  the  country  involves  all  the  evils,  moral  and  physical, 
that  attended  upon  the  work  of  suppressing  the  rebellion  ;  as  many  human  lives  must 
be  sacrificed,  as  much  physical  suffering  inflicted,  and  as  much  property  destroyed  ! 

Now  example  is  a  far  more  potent  teacher  than  any  sum  of  reasoning,  and  I  pro- 
pose to  supply  an  example.  In  1797  the  Bank  of  England,  as  a  consequence  of  certain 
alarms  of  war,  suspended  specie-payments,  and  was  followed  in  this  by  all  the  minor 
banks  of  the  kingdom,  and  remained  in  suspension  until  May,  1821.  Immediately 
upon  the  close  of  the  French  wars  agitation  began  for  a  resumption  of  specie-pay- 
ments. In  1 819,  Parliament  passed  an  act  requiring  the  Bank  of  England  to  pay  its 
notes  on  demand  in  standard  gold  coin  after  a  period  of  four  years:  that  is  to  say, 
after  May,  1823.  Against  the  oppressive  and  destructive  policy  of  this  enactment, 
the  officers  of  the  Bank,*the  merchants  of  London  and  other  cities,  and  large  num- 
bers of  manufactures  throughout  the  kingdom,  most  earnestly  protested.  They  said 
it  must  inevitably  result  in  extensive  disasters  to  all  the  industrial  and  commercial 
interests  of  the  state;  and  they  foretold,  clearly  and  distinctly,  all  the  great  evils  that 
subsequently  marked  its  operation,  the  very  counterparts  of  which  are  afflicting  the 
American  people  in  every  county  in  the  republic  at  this  day  !  But  the  bondholders, 
the  office-holders,  the  speculators  and  the  political  economists,  were  too  strong  for  the 
productive  classes,  and  the  resumption  was  decreed.  The  act  was  passed  by  a  unan- 
imous House  of  Commons,  and  an  almost  equally  unanimous  House  of  Lords;  in 
the  former  amidst  great  tumult  and  excitement,  and  the  glory  and  triumph  of  the 
resumptionists  were  boundless.  At  *he  time  of  the  passage  of  the  act,  the  premium 
on  coin  was  but  five  per  cent.;  and  the  resumptionists  declared  that  the  whole  busi- 
ness of  restoring  the  convertibility  of  bank-notes  consisted  in  raising  their  value  but 
five  per  cent.,  and  they  poured  unsparing  ridicule  upon  all  who  doubted  the  infalli- 
bility of  their  judgment. 

But  what  were  the  actual  consequences  of  the  act?  Let  us  take  the  testimony  of 
witnesses  of  admitted  competency:  "  The  apparent  prosperity  of  the  country,"  wrote 
Robert  Mushet  (said  by  General  Garfield  in  a  speech  delivered  in  the  House  of 
Representatives  in  1868,  to  be  one  of  the  ablest  of  English  writers  on  finances,  as  he 
was),  "seemed  to  vanish  with  the  first  measures  of  the  Bank  of  England  to  effect 
resumption"  {Bank  of  England  Issues,  by  R.  Mushet,  p.  37)  ;  and  he  proceeds  to 
show  how  a  contraction  of  fifty  per  cent,  took  place  before  the  work  was  done,  and 
how  enormously  it  affected  all  the  manufacturing  and  commercial  interests  of  the 
kingdom.    "The  effects  of  this  extraordinary  piece  of  legislation,"  says  Sir  Archi- 


I  o 


bald  Alison,  "  were  soon  apparent.  The  industry  of  the  nation  was  speedily  con- 
gealed as  a  flowing  stream  is  by  the  severity  of  an  Arctic  winter  The 

effects  of  contraction  were  soon  apparent  and  rendered  the  next  three  years  a  period 
of  ceaseless  distress  and  suffering  in  the  British  Islands."  (Alison's  History  of 
Europe,  2d  series,  vol.  ii,  chap.  2).  Said  Lord  Landsdowne  (as  quoted  by  Sir  A. 
Alison),  "Wages  fell  in  all  the  great  stations  of  the  cotton  manufacture  one  half  in  a 
period  of  six  months"  after  the  resumption  act  was  passed;  and  before  resumption 
was  effected,  says  Sir  Archibald  Alison  {History  of  Europe,  2d  series,  vol.  ii,  chap. 
2),  "  the  fall  had  extended  to  wages  in  all  the  operations  of  agriculture  and  manufac- 
ture." Great  numbers  of  artisans  and  labourers  were  thrust  cut  of  employment;  and 
the  suffering  they  endured  finally  brought  them  almost  to  the  madness  of  open  rebel- 
lion. The  prices  of  all  commodities,  said  Mathias  Attwood,  in  a  speech  in  the  House 
of  Commons  in  1822,  alike  of  agriculture  and  manufacture,  were  broken  down  upon 
an  average  fifty  per  cent.;  and  factories  and  lands  stood  idle  and  untilled.  Mr.  Alex- 
ander Baring  (speech  in  the  House  of  Commons,  Dec,  1819),  said  that  the  suffering 
extended  to  all  classes,  and  that  the  condition  of  Great  Britain  in  the  sixth  year  of 
the  peace  was  unparalleled  in  the  history  of  any  nation  or  time.  Lord  Brougham 
(speech  on  the  corn  laws,  made  in  the  House  of  Lords,  February  19,  1839),  said 
that  the  restoration  of  the  currency  was  almost  as  bad  as  the  depreciation ;  and  that 
although  he  had  supported  the  resumption  bill,  he  had  always  deeply  regretted  hav- 
ing done  so.  "The  bitter  fruits  of  the  act,"  says  Sir  James  Graham  (in  his  cele- 
brated pamphlet  on  Corn  ana  Currency,  page  49),  "  were  tasted  by  all  classes,  save 
that  in  the  midst  of  the  ruin  inflicted  upon  farmers  and  manufacturers,  and  the  insur- 
rections of  a  populace  without  bread  and  without  employment,  the  bondholders  and 
tax-eaters  profitted."  They  profitted,  he  said,  by  what  the  producers  lost.  The  dis- 
tress, ruin,  and  bankruptcy  that  took  place,  says  Mr.  Doubleday  (Financial  History 
of  England,  p.  271),  by  reason  of  the  relentless  narrowing  of  the  currency,  were  uni- 
versal and  extended  to  all  the  operations  of  land  and  trade.  That  the  resumption  act  put 
a  burden  upon  industry,  says  J.  R.  McCulloch  ( Commercial  Dictionary,  article  Banks 
and  Banking),  and  in  so  far  was  hostile  to  the  public  interests  it  is  impossible  to 
doubt.  Lord  Overstone  (Tracts  on  Metallic  and  Paper  Currency,  p.  133)  says  that 
the  restoration  of  the  currency  in  1 819-20  produced  extensive  private  suffering,  de- 
rangement of  property,  disturbance  in  the  operations  of  trade,  and  injustice  to  exten- 
sive classes  of  people.  Jean  Baptiste  Say,  the  eminent  French  economist,  after  re- 
viewing the  period  of  the  suspension  and  the  consequences  of  resumption  (Practical 
Political  Economy,  ed.  of  1828,  printed  at  Paris,  p.  61),  sums  up  by  saying  that  "  the 
privileged  classes,  the  public  functionaries,  the  pensioners  of  the  State,  and  the  fund- 
holders,  profitted  by  the  enhancement  in  the  value  of  money  ;"  but  adds  that  "  IT 

LAID  A  BURDEN  UPON  THE  MASSES  OF  THE  PEOPLE  AND  UPON  INDUSTRY  ;  A  BURDEN 

that  so  rich  and  industrious  A  nation,  and  so  admirably  administered  in  other 
respects,  could  alone  support."  Dr.  Thomas  Chalmers  (Political  Economy,  p.  209) 
writing  in  1832,  took  great  pains  to  show  that  the  condition  of  the  British  labouring 
classes  was  seriously  worse  than  it  had  been  up  to  the  yean  814:  it  was  about  that 
time,  he  said,  that  their  progress  was  first  arrested  and  then  turned  backward  ;  and  the 
Hon.  George  C  Brodrick  (Cobden  Club  Essays,  1875),  speaking  of  the  deterioration  in 
the  state  of  the  English  yeomanry,  says  that,  "  By  the  reign  of  William  the  IV  (who 


1 1 


succeeded  to  the  throne  in  1830)  the  descendants  of  freeholders  who  once  sat  as  judges- 
and  legislators  in  the  courts  of  their  own  county  hundred  and  township,  had  sunk  into 
day  labourers,  but  one  degree  removed  from  serfdom,  dependent  on  individual  landlords 
for  the  humblest  dwelling,  and  on  landlords  assembled  at  Quarter  or  Petty  Sessions, 
for  the  security  of  even'  civil  right."  And  let  me  here  observe,  that  it  was  not  until 
1830  that  the  monetary  system  was  finally  and  permanently  settled  upon  a  gold 
foundation.  The  operation  of  the  resumption  act  upon  the  people,  it  is  thus  seen* 
was  one  of  unmitigated  evil ;  and  led  to  great  popular  agitation,  riots,  murders,  con- 
spiracy, tumult,  and  threatened  and  even  attempted  insurrection  in  various  parts  of 
the  kingdom  :  so  extensive  and  portentous,  indeed,  that  the  Government  was  com- 
pelled to  resort  to  the  most  extraordinary  measures  of  repression.  The  local  military 
organizations  were  largely  augmented,  until  they  numbered,  in  addition  to  some  regu- 
lar troops,  35,000  men  ;  and  it  was  this  exhibtion  of  resolute  preparation,  organized 
especially  in  the  manufacturing  districts,  says  Sir  Archibald  Alison  (History  of 
Europe,  2d  Series,  Ch.  x.),  and  the  decisive  demonstration  it  afforded  of  moral  and 
physical  strength  on  the  part  of  the  go\  ernment,  that  saved  Great  Britain  from  an 
alarming  conclusion.  The  political  economists  were  promptly  on  hand  with  their 
petty  and  most  preposterous  explanation  of  the  source  of  the  misery  and  agitation  : 
it  was  oz'er-production  !  an  explanation  rightly  denounced  by  Mr.  Alexander  Baring 
as  pure  trash.  Yes:  over-production  made  the  years  i8iq-'20-'2I  the  most  anxious 
and  distressful  in  modern  British  history.  You  can  consult  the  literature  of  the 
times  for  the  facts.  Thomas  May  Erskine,  in  his  "  Constitutional  History  of 
England,"  says  the  year  1819  was  one  of  peril.  Harriet  Martineau,  in  her  "  History 
of  the  Peace,"  describes  the  distracted  condition  of  the  country  with  graphic  power. 
Sir  Archibald  Alison  is  ornate  and  eloquent  in  his  descriptions  of  the  state  of  the 
nation.  "The  government  alarmists  of  that  period,"  says  Charles  Knight,  in  his 
"History  of  England,"  "were  in  a  condition  of  almost  helpless  terror.  Lord  Eldon 
described  the  people  of  the  country  as  divisible  into  two  classes — the  one  insane, 
who  manifested  their  insanity  in  perfect  apathy,  eating  and  drinking  as  if  there  was 
no  danger  of  political  death,  yea,  even  to-morrow;  contrasted  with  the  other  class, 
who  halloed  on  an  infuriated  multitude  to  acts  of  desperation.  1  The  country,'  said 
the  Chancellor,  '  must  make  new  laws  to  meet  this  state  of  things,  or  we  must  make 
a  shocking  choice  between  military  government  and  anarchy.'  "  An  extra  session 
of  Parliament  was  called  in  November,  1819,  and  it  made  the  new  latvs  necessary,  in 
the  judgment  of  the  ministry,  to  curb  and  quell  the  lawlessness  and  insurrectionary 
spirit  of  a  whole  people,  afflicted  with  the  most  extraordinary  and  unprecedented  of 
all  complaints — over-production  ! — who  had  so  much  to  eat,  to  drink,  and  to  wear, 
that  they  were  upon  the  verge  of  open  rebellion  against  the  constitutional  authori- 
ties!—from  sheer  excess  of  the  fatness  of  the  land,  the  people  of  the  British  Island 
threatened  to  destroy  their  government !  surely  an  unparalleled  thing  in  the  history 
of  nations  !  Shakespere  says  Hamlet  was  sent  into  England  because  all  the  English 
being  reputed  to  be  insane,  an  insane  Prince  was  not  likely  to  be  an  object  of  special 
notice  among  them  ;  and  incontestably  a  nation  must  be  insane  that  grows  rebellious- 
because  of  the  presence  of  too  much  wheat  and  corn,  beef  and  bacon,  butter  and 
cheese,  beer  and  gin,  cotton  and  wool !  Well,  to  meet  this  most  remarkable  and 
abnormal  state  of  affairs,  the  Parliament  made  the  necessary  new  laws ;  they  were 


I  2 

•f* 

known  as  "  the  Six  Acts,"  and  were  denounced  by  the  larger  part  of  the  people  as 
wickedly  oppressive  and  unconstitutional.  Lord  Campbell  said  of  them  that  they 
were  the  last  violation  of  the  constitution  of  the  kingdom.  The  Six  Acts  conferred 
new  and  extreme  powers  upon  the  Government;  they  authorized  arbitrary  arrests 
and  unusual  punishments,  the  suppression  of  public  meetings,  the  search  of  private 
houses  and  seizures  of  private  papers,  and  the  fettering  of  the  public  press !  "  The 
old  spirit  of  liberty  appears  to  have  departed,"  says  Charles  Knight,  commenting 
upon  these  statutes.  And  all  this  insubordination  and  insurrectionary  spirit  on  the 
part  of  the  people,  and  exhibition  of  military  power  and  civil  repression  on  the  part 
of  the  authorities,  were  in  consequence  of  over-production!  of  too  much  to  eat.  to 
drink  and  to  wear!  of  granaries  too  full  of  corn,  of  store-houses  filled  to  repletion 
with  fabrics,  of  industry  too  active,  of  commerce  too  gainful.  It  was  a  portentous 
time,  indeed;  the  harvest  season  of  demagogues  and  of  "  reformers,"  though  there 
seems  to  be  no  authenticated  instance  in  which,  under  guise  of  "  reform,"  a  police- 
man was  made  a  peer,  or  a  thief-taker  a  prime  minister,  or  where  so  vile  a  thing  was 
even  proposed.  The  doctrine  of  over-production  was  of  course  the  invention  of  the 
political  economists,  and  was  not  warranted  either  by  facts  or  common  sense,  any 
more  than  it  is  now  warranted  in  explanation  of  the  distress  prevailing  in  these 
United  States.  It  was  a  very  convenient  phrase,  however,  and  extremely  satisfac- 
tory to  the  office  holders,  bondholders,  speculators,  and  the  political  economists  them- 
selves. 

Now,  what  did  the  English  people  gain  by  way  of  compensation  for  the  losses 
and  suffering  of  the  resumption  period  ?  Freedom  from  any  of  the  monetary  evils 
they  had  suffered  during  the  preriod  of  suspension  ?•  No :  not  one.  Did  they 
escape  fluctuations  in  prices  ?  No.  For  experience  proved,  and  Lord  Overstone, 
the  sternest  and  most  implacable  of  bullionists — the  head  and  front  of  the  currency 
school  of  British  economists — admitted,  when  directly  questioned  upon  the  point, 
that  he  could  detect  no  difference  between  the  fluctuations  which  took  place  during 
the  suspension  and  the  fluctuations  which  took  place  after  resumption  had  been 
accomplished  !  (  Tracts  on  Metallic  and  Paper  Currency,  p.  437.)  Did  they  escape 
speculation  and  over-trading  ?  No.  For  experience  proved,  and  Lord  Overstone 
frankly  admitted,  that  under  the  most  restrictive  system  of  convertible  notes  possible 
to  be  established,  commercial  speculation  had  been  pushed  to  the  most  extravagant 
lengths!  (Ibid.,  page  264.)  Did  they  escape  panics?  No.  For  experience 
proved,  and  Lord  Overstone  and  Mr.  Tooke  both  admitted,  what  indeed  they  could 
not  truthfully  deny,  that  the  commercial  convulsions  under  the  convertible  system 
were  as  great  if  not  even  greater  than  under  the  inconvertible  system  !  Lord  Over- 
stone {Ibid.,  p.  132)  said  that  storms  and  tempests  are  not  more  certain  and  inevitable 
in  the  material  world  than  are  the  periodical  convulsions  of  commercial  affairs,  and 
both  answer,  he  moreover  declared,  similarly  useful  purposes  !  Mr.  Tooke,  after  a 
very  careful  review  (History  of  Prices,  Vol.  1,  p.  149)  said  decidedly,  that  suscepti- 
bility to  a  great  expansion  of  credit  and  consequent  liability  to  collapse  are  NOT 
peculiar  to  an  inconvertible  state  of  the  currency;  that,  in  point  of  fact,  experience 
both  in  Great  Britain  and  in  Continental  Europe  shows  that  a  great  abuse  of  credit 
has  NOT  been  peculiar  to  an  inconvertible  currency ;  and  he  declared,  moreover, 
(Introduction  to  Considerations  on  the  State  of  the  Currency')  that  commercial  convul- 


l3 


sions,  under  the  convertible  system,  had  been  (I  use  his  exact  words)  "more 
striking  ani»  destructive  "' than  under  an  inconvertible  system!  These  are  the 
deliberate  admissions  of  the  two  most  eminent  of  the  English  authorities  upon 
money — the  leaders,  respectively,  of  the  "currency"'  and  "banking"'  schools  of 
economists — upon  this  great  and  vital  subject.  What,  then,  did  the  English  people 
GAIN  by  way  of  result  and  compensation  for  the  enormous  losses  and  suffering 
endured  by  tnem  during  the  transition  period  from  an  inconvertible  to  a  convertible 
currency?  I  will  anwer  in  the  words  of  Jean  Baptiste  Say:  "The  privileged 
classes,  the  public  functionaries,  the  pensioners  of  the  state,  and  the  fundholders 
proritted  by  the  great  enhancement  in  the  value  of  money;  BUT  IT  LAID  A  BURDEN 
UPON  THE  MASSES  OF  THE  PEOPLE  AND  UPON  INDUSTRY  :  a  burden  that  so  rich  and 
industrious  a  nation  could  alone  support."'  Yes  :  British  labour  and  the  British  indus- 
tries achieved  a  burden,  and  the  political  economists  achieved  the  triumph  of  a 
general  principle!  but  at  an  expense  of  loss  and*  misery  that  excites  the  indigna- 
tion and  pity  of  every  generous  and  right-minded  man. 

The  lesson  of  English  resumption  is  one  of  instruction  and  warning;  one  that  the 
whole  American  people  should  take  thoroughly  into  their  hearts.  For  the  vital  truth 
remains,  however  loudly  sentimentalists  and  bank-managers,  moneyed-capitalists  and 
public  creditors,  office-holders  and  political  economists,  may  declaim  of  "  honest 
money,"  that  in  practice  resumption  is  a  vast  scheme  of  spoliation  and  confiscation; 
a  flagrant  wrong  and  outrage  upon  American  industry;  a  cruel  and  wicked  device 
for  permanently  deteriorating  and  debasing  the  character  and  condition  of  American 
artisans  ind  labourers,  both  men  and  women.  In  the  language  of  John  Locke,  "  It 
is  the  interest  of  every  country  that  the  standard  of  its  money,  once  settled,  shall 
BE  INVIOLABLY  AND  IMMUTABLY  KEPT  TO  PERPETUITY.  FOR  WHENEVER  IT  IS  AL- 
TERED, UPON  ANY   PRETENCE  SOEVER,  THE  PUBLIC  WILL   LOSE  BY  IT."     The  true 

honesty  of  the  time  and  the  circumstances  is,  therefore,  that  the  value  of  the  current 
money  -<hall  be  honestly  and  faithfully  preserved,  and  neither  raised  nor  lowered  by 
arbitrary  measures  of  the  legislature  ;  that  the  public  impositions  shall  be  levied  with 
an  equal  pressure  and  honestly  administered  :  that  the  interest-bearing  public  debt  be 
first  paid,  and  with  all  convenient  expedition  ;  that  the  poor  shall  be  protected  in 
their  labour  and  the  rich  in  their  property  ;  and  that  special  and  dishonest  benefits 
be  conferred  upon  none,  neither  upon  banks,  nor  bond-holders,  nor  office-holders. 
These  are  the  special  obligations  of  public  honour,  of  public  justice  and  of  sound 
public  policy.  If  it  be  criminal,  as  undoubtedly  it  would  be,  to  inflate  the  currency 
with  a  view  to  defraud  creditors,  it  is  equally  or  more  criminal  to  contract  it  in  fraud 
and  oppression  of  debtors  and  the  universal  interests  of  labour.  The  existing  mone- 
tary system  is  as  sound  and  safe  as  exists  in  any  country  in  the  world ;  it  is  capable 
of  absolute  demonstration  that  since  1866  prices  have  been  as  uniform  and  steady  in 
America  as  in  (Ireat  Britain,  though  sustained  at  a  higher  level.  If  any  one  expects 
better  protection  for  either  labour  or  property  under  a  convertible  system  than  he  has 
under  the  existing  system,  he  expects  what  never  in  the  world  will  be  realized.  I 
wish  to  see  that  system  so  strengthened  and  perfected  that  it  shall  become  the  per- 
manent system  of  the  country,  for  under  it  the  rights  of  property  and  the  rewards  of 
labour  may  be  alike  protected  and  secured  ;  and  no  system  can  effect  more,  and 
these  are  or  ought  to  be  the  objects  of  every  system  in  every  country.    And  sooner 


'4 


or  later  this  is  the  solid  ground  upon  which  the  labour  and  capital  of  the  country, 
long  and  fruitlessly  oppressed  by  legislative  ignorance  and  sinister  public  policy, 
must  unite  for  a  common  protection  and  safety.  The  American  system  will  prove 
their  final  defence  against  the  gold  fanatics  and  idolators  on  the  one  hand,  and  the 
inflation  fanatics  and  communists  on  the  other:  the  common  and  equal  enemies  of 
morals,  of  order,  of  property  and  of  industry. 

In  conclusion,  I  beg  to  say  that  I  am  neither  inflationist  nor  repudiator.  I  pro- 
test that  I  am  no  enemy  of  the  public  creditors,  of  the  public  honour,  of  the  public 
justice,  or  of  a  sound  public  policy.  The  public  creditors  should  be  paid  to  the  ut- 
termost farthing.  The  public  honor  is  a  glorious  part  of  the  public  estate,  but  I  fail 
to  see  that  its  support  or  preservation  depends  upon  a  particular  form  of  paper-money. 
The  public  justice  is  the  fountain  of  that  perfect  equity  among  the  people  which  is, 
in  its  administration,  the  noblest  of  the  public  functions.  Its  most  memorable  and 
illustrious  exhibition  in  America  took  place  under  an  inconvertible  system  of  paper 
notes,  and  was  the  emancipation  of  four  millions  of  slaves  ;  an  act  upon  which  God 
Himself  must  have  looked  with  favor,  which  won  for  the  Federal  arms  the  good-will 
and  respect  of  all  Christian  men,  and  which  would  have  been  physically  and  politi- 
cally impossible  had  the  national  authorities,  during  the  late  war  for  the  Union,  been 
restricted  to  the  use  of  convertible  paper-money.  And  in  all  I  say  or  do  on  this 
great  subject,  I  am  moved  by  a  sincere  desire  to  promote  the  universal  public  good 
as  I  see  and  understand  it. 

[The  speaker  was  interrupted  by  applause  at  various  parts  of  his  address;  and 
some  discussion  which  took  place  at  its  close,  showed  that  a  considerable  part  of  the 
audience  sympathized  with  the  views  he  had  expressed ;  and  that  what  is  needed  in 
New  York,  as  elsewhere,  is — discussion.] 


AV£RY 
.  &LASSCS 


Avery  Architectural  and  Fine  Arts  Library 
Gift  of  Seymour  B.  Durst  Old  York  Library 


